The United States Attorney's Offices for the Northern District of California, the  Western District of Washington, and the Central District of California, together with the United States Environmental Protection Agency, Region 10, and the United States Coast Guard Pacific Area, announced that Hoegh Fleet Services A/S, a Norwegian operator of a fleet of ocean going cargo ships, pled guilty today in Tacoma, Washington, to seven felony counts, including obstruction and making false statements to federal inspectors, relating to falsification of records and concealment of evidence of intentional dumping of waste oil into the ocean.  On September 25, 2003, Vincent Genovana, an engineering officer on the marine vessel ("M/V") Höegh Minerva, a vessel managed by Hoegh Fleet Services A/S, also pled guilty to falsifying documents and covering up evidence in order to obstruct or influence a United States Coast Guard investigation.

Ships such as the M/V Höegh Minerva generate waste oil from a variety of sources, including from the purifying of heavy fuel oil used to power the ship.  Like other ships of its size, the M/V Höegh Minerva possessed equipment to properly handle its waste oil, including an "oil water separator" to process oily water that collects in the lowermost compartments of the ship.  Federal and international laws require that oily water be processed through the oily water separator so that any water discharged into the sea contains less than 15 parts per million of oil.  Under U.S. law, ships like the M/V Höegh Minerva that enter U.S. waters must maintain an "Oil Record Book" to document all transfers of oil on the ship, including discharges to the sea.

Second Engineer Vincent Genovana directed another crew member on board the M/V Höegh Minerva to fabricate a bypass pipe that was fitted into the existing vessel piping system for the oil water separator to allow crew members to pump inadequately treated oil contaminated waste water directly overboard into the ocean.  Crew members referred to the pipe as the "magic pipe."  The magic pipe was initially installed in June 2003 while the vessel sailed between Canada and Asia.  It remained installed for several days at a time, allowing crew members to bypass the ship's pollution prevention equipment.  None of the discharges were recorded in the Oil Record Book as required by international and U.S. law.  Instead, crew members knowingly made false and fraudulent entries and omissions in the Oil Record Book in an effort to conceal the illegal discharges from United States Coast Guard inspectors.

The magic pipe was removed several days before the M/V Höegh Minerva arrived at the Port of Los Angeles, California on September 2, 2003.  Following its removal, crew members painted the fittings where the magic pipe had been installed in an effort to conceal the prior use of the fittings.  U.S. Coast Guard officials boarded the vessel at the Port of Los Angeles and, several days later, in Richmond, California.  At both ports, ships officers failed to inform Coast Guard officials of the illegal dumping.  Moreover, in Richmond, crew members presented Coast Guard inspectors with the falsified Oil Record Book.  On September 11, 2003, the falsified Oil Record Book was again presented to U.S. Coast Guard inspectors at the Port of Vancouver, Washington.  The illegal dumping onboard the ship came to light after a whistle-blower on board the ship secretly passed a note to Coast Guard inspectors describing the illegal activity.  An investigation in Vancouver prompted by the whistle-blower note led to the discovery of the magic pipe.

Hoegh Fleet Services A/S pled guilty to felony violations in the three judicial districts for obstructing Coast Guard proceedings, for obstructing an agency matter, for making false statements to the Coast Guard, and for failing to maintain proper records associated with the ship's handling of its waste oil.  If approved by the court, the plea agreement requires that Hoegh Fleet Services A/S pay a fine of $3.5 million, develop and implement a comprehensive environmental compliance plan for its fleet of 38 vessels that call on United States ports, and serve four years on probation.  Hoegh Fleet Services A/S is scheduled to be sentenced in U.S. District Court in Tacoma, Washington on June 29, 2004 at 9:30 a.m.

Second Engineer Genovana agreed to cooperate with the government in its investigation of Hoegh Fleet Services A/S.  As a result of his cooperation, on February 27, 2004, Mr. Genovana was sentenced in U.S. District Court in Tacoma to a 30-day term in custody, followed by two years of supervised release.

These guilty pleas are the latest in a series of recent federal criminal prosecutions along the West Coast in which shipping corporations and ship engineers have been convicted and sentenced for similar criminal behavior. 

United States Attorney Kevin V. Ryan said, "Our oceans and coastal waters are a national treasure, not a dumping ground for sludge and oil waste.  Vessel operators who pollute and deceive without regard for our environmental laws need to be held fully accountable for their crimes." 

All three United States Attorneys involved in the case, Kevin Ryan, John McKay, and Debra Yang emphasized that the multi-district prosecution of Hoegh Fleet Services A/S is a clear indication of the Department of Justice's resolve to work cooperatively with state and federal agencies to stop these practices and require vessel operators to develop comprehensive compliance programs to prevent future discharges.  The United States Attorneys further applauded the courageous actions of a crew member aboard the ship who blew the whistle on the ship's illegal pollution activities, leading to the discovery of the bypass pipe by state and federal inspectors.

This matter was investigated by the Environmental Protection Agency Criminal Investigation Division and Coast Guard Marine Safety Office, with assistance from the Coast Guard Investigative Service.  The case was prosecuted in the Northern District of California by Assistant United States Attorney Maureen Bessette.